Suncorp says claims program 'best defence' against inflation

Suncorp says claims program ‘best defence’ against inflation

14 November 2022

Suncorp CEO Steve Johnston says the insurer’s claims program remains its “best defence against the inflationary forces” at play across the economy as the group affirmed its full-year earnings guidance.

“We have talked about our ability over the last couple of years to stand apart from some of the broad inflationary pressures, and that is continuing,” Mr Johnston told an investor day last week.

The company says premium growth across the portfolio is in line with expectations from both a volume and average written premium perspective, and the group continues to target an underlying insurance trading ratio of 10-12% for this financial year.

“That is despite the material increase in reinsurance costs, hazard allowances and inflation that we have experienced and that we have absorbed through the period of time that has passed since we first set that target,” Mr Johnston said.

The company says the renewal of its home building panel is achieving positive results relative to broader inflation, its digitalisation program is progressing and new technologies are improving its pricing capabilities.

Suncorp continues to advocate for improved disaster resilience measures, including investment in mitigation projects and better land-use planning, warning that historical mistakes will take time to fix.

Mr Johnston says past decisions, probably taken with good intentions, have led to issues that will require further spending across federal, state and local governments, going beyond recent commitments that are a “step in the right direction”.

“This is a multi-year, I think ultimately multi-billion-dollar program that needs to be implemented at all levels of government to really make a material difference to more than 100 years of potentially bad planning decisions,” he said.